7 Market-Beating Stocks to Buy to Weather a Trade War

If you're careful, you can avoid the worst and receive the best the market has to offer

Next week, the trade war with China version 2.0 begins. The U.S. will slap tariffs on $200 billion worth of Chinese goods headed to the U.S. How will this affect which stocks to buy? Well, this has hardly rattled the broad markets — as a matter of fact, that they’re acting as they do when they get any good news. Realistic news that the trade war is having an effect is punished for merely being uttered.

For example, Apple (NASDAQ:AAPL) is rallying because the U.S. made an exception for tariffs on its products. But Micron (NASDAQ:MU) came out with great numbers and rallied big, until it got hammered for saying the obvious: Tariffs would affect earnings moving forward.

The fact is, tariffs are going to start to bite, and if you’re not preparing your portfolio, you will pay — now or later. The best strategy is to avoid the problem altogether.

CyberArk Software (CYBR)

CyberArk Software (NASDAQ:CYBR) has a couple things going for it. First, it’s in a very hot, very secure space — cybersecurity. Second, it’s an Israel-based company, so it’s outside any repercussions of U.S. trade shenanigans.

As for the sector, cybersecurity will be one of the most enduring sectors of every significant economy in the world for decades. As long as there are people, businesses and governments running on computers, security will be a necessary spend.

CYBR specializes in Privileged Access Security in enterprise systems. As your access to information increases, that information becomes more more vulnerable. CYBR specializes in making these key access points secure, so that no one is hacking in.

Its clients include some of the biggest companies in the world and their services are in high demand around the globe. This unique, next-generation security will be in high demand for years to come, making this a great stock to buy.

Global Water Resources (GWRS)

Global Water Resources (NASDAQ:GWRS) is a water resources management company that operates in and around the Phoenix, Arizona area. So it’s a company that manages the limited water resources in an arid region of the Southwest U.S. That’s a pretty good business model. It’s essentially a water utility, and even throws off a solid 2.8% dividend.

Now, this isn’t going to be a huge grower, but it will be solid company that will grow as the region grows. And the fact that it’s only 15 years old means it doesn’t have to drag legacy systems out of the dark ages.

It understands that fresh water isn’t unlimited and that finding innovative ways to manage wastewater and recycle water resources are crucial to keeping water available to its customers and for building a successful business.

And let’s face it, selling water to people in the desert is a pretty steady business.

BioTelemetry Inc (BEAT)

BioTelemetry Inc (NASDAQ:BEAT) is a very interesting company that started back in 1994. Remember, back then Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) wouldn’t be around for another five years and the worldwide web was hardly anything the average person understood, much less used regularly.

BEAT was building out products that were able to marry the needs of cardiac and blood monitoring equipment to the advances in technology. Today its digital monitors are some of the best in the business.

And now, as we reach the next iteration of the Digital Age — the Mobile Era — all this vision and work is really paying off for BEAT.

What’s more, as the baby boomers start to move into the golden years, chronic issues like diabetes and heart disease are creating a huge demand for this type of equipment. And regardless of how the healthcare issue turns out, remote monitoring is much for efficient and cost-effective way to work with patients, so it’s a winner regardless of what happens.

That’s likely why BEAT stock is up 103% year to date with building momentum, and why it’s a smart stock to buy.

Astronics (ATRO)

Astronics Corporation (NASDAQ:ATRO) is one of those stocks to buy that is well known to its huge corporate customers but is unknown to everyday consumers.

Since 1968, ATRO has been a leading manufacturer and supplier of electrical power and distribution systems (think lighting, communications, avionics, test systems, climate control, etc) to the commercial aviation sector. It has another division that does the same type of work for the defense sector. So, it’s more than likely that any time you step onto a plane, ATRO has some equipment or systems that have been tested by ATRO on board.

Given that trade wars aren’t going to slow travel demand down (and will certainly not slow down defense spending), ATRO is in trade war-proof spot.

Also, given its longevity and relatively small size (a $1.2 billion market cap), it is solid on its own and also an attractive addition to bigger defense player.

Seadrill (SDRL)

Seadrill (NYSE:SDRL) is an offshore drilling company that operates around the world.

Basically, large integrated oil firms contract out their offshore exploration and production (E&P) operations to subcontractors like SDRL. The big oil knows where it wants to drill, and hires SDRL to bring its rigs there and drill.

In the past five years or so, the offshore drilling market took a steep dive as onshore shale in the U.S. began to boom. When oil prices dropped significantly, that also cut into offshore drilling demand.

But now, Iranian oil is offline, as is Venezuela, and OPEC is looking to run prices up. Add to that the resurgence of the global economy, and offshore E&P is kicking up again — making this a great stock to buy.

For now, SDRL isn’t in its big growth phase, but as energy demand continues to grow, SDRL will be a beneficiary. And because energy is such a core need of every economy, trade wars only add to the need for a variety of supply sources.

InfraREIT (INFR)

InfraREIT Inc (NYSE:HIFR) is about as trade-war-safe a stock to buy as you can get. It is a real estate investment trust (REIT) that operates in a very unique niche. It owns and manages rate-regulated electric transmission assets in the state of Texas.

First, Texas is seeing a boom in its population as business see its low corporate taxes as an attractive alternative to higher-tax states like California. That has seen a boom in population growth all around the state and a tech boom as well.

Both people and technology rely heavily on reliable electricity. Owning and managing that infrastructure may not be very sexy, but it is solid growth. And it’s safe.

HIFR stock is up 13% year to date and has a solid 4.7% dividend, so it may not be tearing up the track, but this sort of return off a niche REIT is a good deal.

Callaway (ELY)

Callaway Golf (NYSE:ELY) has been on my “buy” list for a while now, which may seem odd for a company that specializes in golf products and clothing.

While there is talk about millennials being too impatient to play the sport and dwindling numbers of younger players, that isn’t what golf establishments are showing in their numbers.

Golf continues to grow. But it’s adapting to younger players that aren’t as interested in spending eight hours at the golf course. There are more fun events going on around driving ranges. Technology is being incorporated into the game on a number of different levels to make it more fun.

And ELY always has been a pioneer in developing equipment that makes golf more enjoyable for novice players to pros. ELY also has a California-style clothing division (TravisMathew) as well as a luggage brand (OGIO) to round out its club brands (Callaway, Odessey, Toulon Designs).

ELY stock is up 64% year to date and is still selling at a price-to-earnings ratio of 21. There’s still plenty of value to go along with the growth.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.